Financing a Property Mortgage Interest Development

Mortgage Interest Development

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Source: Credit Suisse, Datastream. Last data point: 03.04.2017

Slight rise in interest rates expected for Fix mortgages with long terms 

Switzerland's GDP growth is forecast at 1.5% in 2017, a slight improvement on last year, and this growth is again more broadly based. Positive impulses can be expected from consumer spending, and the situation is steadily improving for export-oriented sectors. However, downside risks persist, with growth heavily dependent on the future direction of the Swiss franc and the European economic situation. The inflation rate has recently risen back above zero, but with an expected rate of 0.5% in 2017 it will remain at a low level. The Swiss National Bank (SNB) can therefore continue putting the exchange rate at the forefront of monetary policy.

In the coming 12 months the SNB is therefore likely to leave the target range for base rates unchanged at between -1.25% and -0.25%. We therefore expect interest rates for Flex rollover mortgages to remain at their current lows over the next 12 months. A similar trend is also anticipated for Fix mortgages with short and medium terms. By contrast, interest rates for Fix mortgages with long terms are likely to rise slightly by 25 to 30 basis points over the coming 12 months. As in recent weeks, however, upward and downward spikes must once again be expected for all maturities.

  Interest rate
Forecasts for
  03.04.2017 3 mths 6 mths 12 mths
Flex rollover mortgage1
1.02% 1.02% 1.02% 1.02%
Fix mortgage (3 years)2
1.03% 1.05% 1.05% 1.05%
Fix mortgage (5 years)2
1.24% 1.25% 1.25% 1.25%
Fix mortgage (10 years)2
1.71% 1.90% 1.90% 2.00%
Fix mortgage (15 years)2
2.11% 2.30% 2.35% 2.40%

The interest rates listed are indicative values and apply to top-quality residential property and borrowers with impeccable creditworthiness.

1 Flex rollover mortgage (framework term three years). Interest rate based on three-month CHF LIBOR. Interest rate adjusted every three months.
2 Fix mortgages. Fixed term and interest rate for the entire term.